Thursday, November 11, 2010

Soccernomics: Dumping

The Scot Thompson announcement go me thinking again about the Timbers and some of the economic decisions they have been making. One thing that has interested me ever since the crest fiasco is what the Timbers would do with all of the launch merchandise.

A little background for the uninitiated: the Timbers, with much fanfare, unveiled their new logo this past summer. Unfortunately, they had not kept the Timbers Army (TA) in the loop and the Army, the Timbers supporters group, hated it and let their hate be known loudly and clearly.

The Timbers, to their credit, quickly met with the Army and made some subtle but significant changes to the logo. I have posted the before and after above.

Of course, in anticipation of the launch, the Timbers ordered an avalanche of merchandise. And why not, it doesn't have a sell-by date, so making sure you have enough on hand is important. Ex post, however, they had a real conundrum: tons of suddenly obsolete merchandise waiting to be sold.

I assumed that they would just eat the loss and that soon poor people across Africa would suddenly be wearing the original Timbers logo along with their new Texas Rangers World Series Champions gear. But no, the Timbers apparently decided that the changes they made were small enough that the original merchandise was just fine. So they kept on selling it (without any disclaimer) on their web-site and in stores like Sports Authority.

At first this might have been because they didn't have updated merchandise to replace it, but now, it is well clear that they intend to get whatever money they can for the original stuff and withhold the new stuff until they are able to offload as much as the old stuff as they can.

I say this because I watched new logo merchandise slowly creep in to their on-line store alongside the old stuff, but it was never exactly replacement merchandise. Then, all of a sudden, all of the new logo stuff was completely removed and they are currently only selling the original logo stuff, but now at a deep discount. One suspects that they are trying for one last push to get the old stuff out the door before they dump it completely.

I got a t-shirt for the boy about a week before the new logo was released. The Timbers store told me they would gladly exchange the shirt once new logo shirts were in. They expected them months ago and I suspect they have had them that long. For us it is a moot point, they boy likes and has already practically worn out the shirt.

As an economist I have no problem with the strategy save for the part where they don't explicitly explain to the punters what they are buying. The market can decide how much the original stuff is worth, and it is worth something, but in order to do so, full information is necessary. I also don't like the holding back of the new stuff so that people like me can't or don't bother to exchange. Seems a little nickel and dime.

I find it curious that they wouldn't just dump it all and start fresh, however, diluting the marketplace with an old brand is odd I think given the magnitude of the investment in what they hope will be a long running brand in Portland. But then, the Timbers have shown themselves to be shrewd businesspeople and so I reserve judgement. I don't know if there is a blueprint for this type of thing, but I have to admit it smacks just a little bit of greed. I mean, how much money could we really be talking about? Is it really worth it in the long run?

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